Members considered the report that was requesting Cabinet to approve the use of £694,000 of grant funding and £788,860 of HRA match funding from the already approved HRA capital programme, to purchase 5 units for the Local Authority Housing Fund (LAHF) R2. Members were reminded that this was a grant that had been considered before. In the first tranche Council applied for and were granted £1.19 million to provide homes for those who arrived in the country via the following approaches:
· The Afghan Citizen Resettlement Scheme (including eligible British Nationals under this scheme) (ACRS);
· Afghan Relocations and Assistance Policy (ARAP);
· Ukraine Family Scheme (UFS);
· Homes for Ukraine (HFU)
· Ukraine Extension Scheme (UES).
In March this year, it was announced that the Local Authority Housing Fund would be expanded by £250m for a second round of funding. Thanet had been identified as eligible for capital grant funding with an indicative allocation of £694,000 in funding. This was to purchase four homes for the resettlement element and one home for the temporary accommodation element.
Like LAHF Round One, this was a match-funded grant; in order to use this round, it was necessary to match fund the acquisitions with £788,860 of borrowing within the HRA capital programme. The properties had been identified and must be purchased by 31st March 2024. For every housing acquisition a business plan modelling was completed. The modelling for this grant scheme showed that the scheme generated a surplus from year 1 due to the grant subsidy, which allowed these homes to immediately support further investment in the Affordable Homes Programme. It was proposed that Council let these homes at a genuinely affordable rent, in line with its approved Tenancy Strategy.
Discussions had taken place with a local developer currently developing the Westwood Cross site to purchase five by 3 bed units. The units would be an ‘off the shelf’ purchase with no refurbishments or adaptations needed. They were nearing completion and would be ready soon. The developer had accepted a provisional offer, subject to approval of £1.4m. This amount was equivalent to 80% of Market Value.
As with the previous tranche of funding, the timescales around this funding were extraordinarily tight and in order to deliver the homes required in the period given, direct purchase was the only realistic way forward. This aspect of funding limited the Council’s creativity in providing social housing to the district. However, with these proposals, the Council would be able to support those individuals who need support at an incredibly difficult time, for the allotted time that they were allowed to remain in the country by government. These proposals would also not only grow the Council’s general portfolio but also support the growth of housing in the district.
These homes were significant not just in supporting those who have experienced war and displacement, but also in supporting other vulnerable local residents. Due to the scale of this grant and its provision of 46% of the overall cost, the rental of these properties would produce a surplus from year one. This was especially significant for Cabinet’s housing strategy, as it provided a revenue stream to not only offset borrowing to produce the 400 plus properties being developed for general usage, but also to support further housing acquisition and development across the district.
It was exceedingly rare that both moral and financial benefits align in a manner as reflected in these proposals and this was one of those rare cases. Life often calls on society to do the right thing for others. This moral imperative ran through every decision that the Council made and was especially pertinent in this instance.
Councillor Bayford spoke under Council Procedure Rule 20.1.
Councillor Whitehead proposed, Councillor Yates seconded and Cabinet approved the purchase of the 5 homes in line with the grant guidelines of LAHF R2.